Recent months have been characterised by a number of uncertainties for the steel sector. The Turkish crisis that exploded during the summer brought a slump in scrap prices and many concerns for the global steel industry. In addition, recent evaluation of the upcoming restrictions for winter steel output in China clearly confirm that output is set to continue growing this year. This is causing some market observers to fear that oversupply will once again become a major issue.

Both iron ore and scrap reached a twelve-month peak in late February/early March, since when the indicators have lowered. During recent weeks, nevertheless, both raw materials have strengthened slightly, confirmation that the sector remains very resilient this year.

Compared with the levels registered at the beginning of October 2017, iron ore is currently being trade at 8% y-o-y more. With the holidays in China last week, the price remained firm at $68-69/tonne cfr Qingdao and has been stable since the beginning of September. Last year at the beginning of October iron ore was trading at some $62-63/t cfr Qingdao. It was in the middle of a recovery path that would take the level to almost $80/t cfr Qingdao in February 2018.